Find Hidden Opportunities in the Senior Market Learn how to research the market, i.d. trends, and get a resource guide to help you stay cutting-edge or start up your business today.
By Elizabeth Wilson •
Opinions expressed by Entrepreneur contributors are their own.
What are some specific tips you have for entrepreneurs who want to start a business serving the senior market? The rules of starting any business still apply to serving the senior market. Offer a product or service of value that meets an unmet need, put together a business plan, etc. When targeting older persons it's especially important to consider the functionality and safety of the product and how well that matches up with their needs. Depending on what you're selling you may also have to consider providing support services such as assistance using a new technology or device. Think "universal design"--a rapidly growing concept with the design community [meaning design that's useful to everyone]. Not only will entrepreneurs make and sell better products in the senior market; they will also be more successful to a broader range of consumers.
When it comes to marketing, seniors are a tough crowd. Puffery is wasted on them. They've seen it all when it comes to advertising. Today's octogenarian grew up listening to radio jingles and watching six decades of commercial television. As we mature, we become much more savvy consumers and are more likely to ask ourselves "do I really need this?" than, say, a 14-year-old. It also goes without saying but is especially true for older adults: Avoid stereotyping in your promotional efforts, and make sure your sales force is not condescending or impatient.
Try to segment a particular piece of the senior or baby boomer market. This is not one big homogenous group that ranges in age from 55 to 95. Consider defining your market by education, cultural values, employment and health status. For example, the needs of a healthy, active and employed 65-year-old will differ sharply from a retiree of the same age with poor health. The market segment you choose to target will greatly affect how your product or service will be distributed and how much you can charge.
If you are a small, community-based business, it will be helpful for you to do a little networking with your local aging network or people you suspect are working with or on behalf of the older adults in your community. If you don't know where to start, the U.S. Administration on Aging offers an "Eldercare Locator," which can put you in touch with local agencies serving your community.
What tips can you give to those already in the business? Businesses already serving the senior market may need to change the products and services they offer to the baby boomers who are now just entering their 60s. While it has been a long-held belief that baby boomers are and will be healthier and more active than any other previous cohort of seniors before them, the recent downturn in the economy indicates that many baby boomers will not be retiring as soon as they thought.
Businesses that rely on retiree travel and leisure, for example, may want to come up with a new strategy to accommodate work schedules for older adults. In addition, due to the collapse of the housing market, many baby boomers owe more on their homes than they are worth, and it will be difficult for them to transition into retirement housing. While this is a gloomy situation, it does present opportunities for businesses that cater to older persons aging in place. Successful business models may include operations that can provide community-based or home-based services, including health care, meals, personnel care or can assist home-based businesses in areas such as technology support.
Are there things you see businesses doing wrong (such as in marketing or other aspects of their business) that you would recommend they do differently? The No. 1 mistake is to ignore this huge market. It's also wrong to assume that older people don't know how to use technology. In fact, older adults are the fastest-growing group of internet users. According to the U.S. Census Bureau, people over the age of 65 spend more than $7 billion dollars per year online. Another mistake people make is to assume that people's consumption habits don't change over time. If older Americans are as brand loyal as they're made out to be, then the American auto industry certainly would not be in such dire straits.
What's your top 5 check-off list addressing how entrepreneurs should go about senior-market research? Good market research doesn't change just because you're targeting a particular demographic--all the rules still apply. It would be helpful to hire a gerontologist as a consultant to inform any focus group or survey questionnaires used in product research to find out:
- What need is to be met with the introduction of the product?
- How will those needs change over the life of the product?
- How significant are functionality issues related to familiarity with technology/physical ability, etc.?
- What language is appropriate and what messages resonate with this target audience?
- How might the target audience define themselves (e.g., do they think they are "older women" or do they define themselves as "boomers" or "seniors")? How congruent are your views of this audience vs. how they self-identify?
You may also want to consider hiring older adults--who better to understand your target audience and effectively communicate to them than their peers?
What's happening right now that's different than before for businesses that cater to seniors? There's a revolution in the way we view older people, and this is slowly beginning to be reflected by the media. In many ways life does become an imitation of art; when older people see themselves portrayed as active, relevant individuals, they have raised expectations for themselves. For example, movies like "Young@Heart" and "Love in the Time of Cholera," made in the past few years, reflect interesting and vibrant older characters who have not been relegated to institutionalization. That's the good news. The bad news is that the current major economic downturn is going to affect consumers' ability to save for retirement, spend in retirement and be as active as they thought they would be.
The health-care reform that's happening right now will also certainly have an impact on the types of products and services that will be reimbursed by Medicare. We may, I hope, see more funding available for prevention programs, for example. There are lots of new regulations affecting businesses particularly related to health care. Regulatory market changes have created a need for new and different ways of storing, managing and accessing information. Communication channels have also evolved to be more instantaneous and more accessible to consumers 24 hours a day. There are more specialized ways to market new products and programs through both additional avenues in traditional media as well as new online mediums.
Also helpful is cRANKy.com, the world's first age-relevant search engine, which is useful for discovering the sites seniors actually go to rather than websites designed to attract seniors.
Resources: For people not ready to go back to graduate school, Maria Henke of USC recommends a wide variety of short courses and continuing education alternatives offered [in California] and elsewhere. For example, the California Association for Health Services at Home offers short certificate programs, and most national aging associations offer educational programs through their national conferences, such as the National Council on Aging and the American Society on Aging. One of our most popular series of short courses here at USC is on home modifications or "Aging in Place." Students enrolled in these courses either want to start their own business or expand into this market. Here is USC's resource link. |
Maria Henke is assistant dean of the University of Southern California Davis School of Gerontology, the world's oldest and largest school of gerontology. With 20-plus years of experience in the field, her efforts to promote healthy lifestyles for older Americans include the websites homemods.org, stopfalls.org and ageworks.com. Henke was instrumental in designing the curriculum for several pioneering distance-learning programs at the USC Davis School of Gerontology, including the online Master of Arts in gerontology, the online master's in long term care administration and, most recently, the master's in aging services management. She has published several academic articles related to distance learning and older persons' use of the internet. Henke received her master's degree in communication management from the USC Annenberg School for Communication.
